Chancellor John Healey has ruled out raising capital gains tax at the upcoming Budget, rejecting calls from some Labour figures who have urged the move. The tax applies to the profit made from selling assets such as a house or shares.
Cabinet ministers Wes Streeting and Louise Haigh both spoke of raising the tax over the summer, before Andy Burnham became Prime Minister. However, Mr Healey has dismissed the proposal after warnings that it could end up costing the Government money if wealthy individuals leave the country or defer selling assets, according to the Times.
Concerns over economic impact
Lord O'Neill of Gately, who has advised Mr Burnham and worked on the Northern Powerhouse project, told the newspaper that "raising capital gains tax would send very much the wrong message to business".
The biggest revenue-raising measure expected in the Budget is an increase in the rate banks pay on their profits, widely reported across the media last week. That is anticipated to fund cost-of-living support for households and businesses.
Budget outlook and political pressure
The Chancellor has acknowledged that Britain finds itself in a "tough" position ahead of the Budget, and is reported to be downplaying the prospect of major revenue-raising measures in his October 28 statement.
Conservative leader Kemi Badenoch is due to warn the Government to slash its spending plans and reduce borrowing at the Budget. In a speech on Tuesday, she will urge Mr Burnham and his Chancellor to "live within our means", and signpost the Tories' package worth £70bn of cuts to spending – including to welfare and the civil service headcount – as a place to start.
Public opinion ahead of the Budget
Pre-Budget polling by Ipsos has revealed that the majority of the public have a mixed opinion of the Chancellor, with 67% of them believing he is doing neither a good nor bad job. The survey of 1,077 Britons carried out between October 9 and 12 also found that 65% of the public expects some form of tax rise at the Budget.
